PACCAR Inc.

Good morning, and welcome to PACCAR's third quarter 2020 earnings conference call. All lines will be in a listen-only mode until the question and answer session. Today's call is being recorded, and if anyone has an objection, they should disconnect at this time. I would now like to introduce Mr. Ken Hastings, PACCAR's Director of Investor Relations. Mr. Hastings, please go ahead.

Good morning. We would like to welcome those listening by phone and those on the webcast. My name is Ken Hastings, PACR's Director of Investor Relations. And joining me this morning are Preston Feith, Chief Executive Officer, Harry Skippers, President and Chief Financial Officer, and Michael Barkley, Senior Vice President and Controller. As with prior conference calls, we ask that any members of the media on the line participate in a listen-only mode. Certain information presented today will be forward-looking and involve risks and uncertainties, including general economic and competitive conditions that may affect expected results. For additional information, please see our SEC filings and the investor relations page of PACCAR.com. I would now like to introduce Preston Fite.

Hey, good morning. Barry Skippers, Michael Barkley, and I will update you on our excellent third quarter results and business highlights. First and foremost, I appreciate our outstanding PACCAR employees. They have continued to focus on staying safe and healthy while delivering the highest quality trucks, advanced power trains, and transportation solutions to our customers. PACCAR achieved strong revenues and net income in the third quarter. PACCAR's quarterly truck deliveries doubled to 36,000 vehicles compared to the second quarter of this year. PACCAR's quarterly sales and financial services revenues were $4.9 billion. and third quarter net income was $386 million. PACCAR parts achieved quarterly revenues of over $1 billion and pre-tax profits of $210 million, exceeding the strong third quarter of last year. Truck, parts, and other gross margins increased to 12.8%. PACCAR Financial achieved robust new financing business and pre-tax income of $56 million. U.S. and Canada Class A truck industry orders through September were 18% higher than the same period last year. PACCAR expects fourth quarter deliveries to be 10% higher than the third quarter as build rates increase in all markets. The fourth quarter will have fewer build days in North America and more build days in Europe. Fourth quarter truck parts and other gross margins are estimated to be in a range of 12% to 13%. We have raised our 2020 market size estimates in North America, Europe, and South America. We estimate Class 8 industry retail sales in the US and Canada to be in a range of 190 to 210,000 trucks this year. Peterbilt and Kenworth have achieved 29.7% market share through September, compared to 29.2% for the same period last year. For 2021, The U.S. economy is expected to grow about 4%, and we estimate the U.S. and Canadian Class A truck market to be in the range of 210,000 to 250,000 vehicles. In Europe, truck industry registrations in the above 16-ton market are estimated to be in a range of 210,000 to 230,000 vehicles this year. DOF has achieved market share of 16.1% through September this year. European economies are projected to grow about 5% next year, and we expect truck registrations to increase to a range of 230,000 to 270,000 units. The South American above 16 ton market is projected to be in a range of 95,000 to 105,000 units next year. DOF Brazil introduced a new XF truck in the third quarter, which has been well received by our customers. In the Brazilian above 40-ton segment where DOF competes, DOF market share through September increased to a record 9.3%. PACCAR's zero emissions vehicle programs continue to move forward. We've begun accepting orders for our industry-leading battery electric trucks that will serve the medium duty, regional haul, and refuse markets in Europe and North America. Production of these trucks will begin next year. vehicle charging stations will be available through Packard Parts. We're pleased to share that Packard, Kenworth, Peterbilt, Packard Parts, and DynaCraft were each recognized as a top company for women to work for in transportation by the Women in Trucking Association. We were honored for our excellent working environment and company culture that supports gender diversity. Packard's committed to hiring and promoting the most talented people in the world and we know that the best people represent the diversity present in the global community. Harry Skipper will now provide an update on PACCAR parts, PACCAR financial services, and other business highlights. Thank you. Harry?